JPMorgan just landed a $1 trillion win in a growing business

Daniel Pinto, the CEO of JPMorgan's corporate and investment bank.JPMorgan

State Street's pain has turned out to be JPMorgan's gain.

BlackRock, the world's largest asset manager, announced that it would move over $1 trillion of its assets from the custody of State Street to its rival JPMorgan to cut costs for clients. JPMorgan said it expected to take charge of BlackRock's assets over the next two years.

"We think the transfer was triggered by a better overall value proposition from JPMorgan for both Blackrock's clients and Blackrock corporate, which includes both pricing and client service," Credit Suisse said in a note responding to the news.

The bank has been working on growing its Custody & Fund Services business, and the BlackRock deal provides a huge boost to these efforts. Custody involves things like settlement, safekeeping and asset servicing of securities, and accounting and administration services for funds.

"This historic deal expands our relationship with BlackRock and is a validation of the investments we've made and the resources we've added to the custody and fund services business," Daniel Pinto, the CEO of JPMorgan's corporate and investment bank, said in a press release on Wednesday.

JPMorgan's business with existing custody-services clients has grown by 10% in the past 12 months, and 95% of its clients also use the bank's investment banking or markets business. The unit enjoys a healthy operating margin of about 25%.